Describe The Main Features Of A Buying Procedure?


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The main features of a buying procedure include: Identification of a need, a purchase order if the product has already been bought previously, selecting a supplier, determining the price paid, and the lead time and expected quantity to be delivered.

Businesses must first identify the need in any procurement or buying process. A purchase requisition or PR is submitted for those that have an automated buying system in place, which is sent to the buyer to clearly state what item or service is needed. If the service or item has already been bought before, a purchase order is sent to the supplier, which follows the previously agreed terms and conditions.

Supplier selection involves requesting for quotations from a number of suppliers and choosing one which has the best quality and price to match the business's needs. A buyer will specify a quantity and delivery date based on the requirements of the business, and may also include technical qualifications if need be.

Determining the price paid involves comparing various quotations sent in and negotiating the most suitable price from a supplier. The buyer is held responsible for ensuring that each bid or quotation directly reflects all the work that needs to be done, and also already includes all applicable shipping and tax charges. This is done so that when the final purchase order is placed, it is clear what the exact total landed cost will be.

The lead time and expected quantity to be delivered should also be clear between both supplier and buyer to avoid conflict. A buyer will only accept a quote that can meet the required date and provide all the expected services or products by the date or before. In the event that suppliers cannot provide the agreed terms by the said date, buyers may incur an expedite premium.

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